From 1989 to 1991 I lived in Finsbury Park, decades before it began to show signs of gentrification. I'd get home late from unpaid standup try-out spots, and it was hard to hold down a day job. At the end of my street, outside a hardware shop on Tollington Park, was a contraption so unusual that each night, in a state of adrenaline-driven imbalance, I would find myself staring at it in the small hours in bleak fascination. It was a maggot vending machine; faintly glowing, dimly humming, and stuffed with millions of live maggots throbbing gently en masse in a barely warmed state of collective suspended animation. As a younger, and more impressionable, man I couldn't help but find it vaguely profound.

Illustration by David Foldvari David Foldvari

One hot July night in 1990, around 1.30am, I was staring at the maggot machine as usual, a contraband comedy club's can of Carlsberg in hand, thinking about the maggots as metaphors for something or other, when my musings were interrupted by a sharply dressed young man, of around my age, emerging from a van bearing the legend "House of Maggots". "Excuse me sir," he said, politely, "maggot maintenance", and he wheeled over a pallet of plastic cool boxes. Unlocking the maggot machine he began to pour gallons of immobilised maggots into it, topping up the depleted stock within.

"Can I have a look, mate?" I asked. "I walk past this machine every night and I've wondered how it works." "By all means," said the man, and helped me up with a politeness and confidence that my prejudiced assumptions hadn't led me to expect in a man who vended maggots. Beneath me, millions of maggots pulsated slowly in comatose contentment. "I keep them just warm enough to live," he said, "but not hot enough to get excited, nor cold enough to expire. Here, pour this on them. It's their food." The man handed me a sachet of yeasty smelling flakes and I sprinkled it over the ignorant maggots.

"You're out late," the maggot man said, as he locked up the machine. "I'm trying to be a comedian," I replied. "I get back late from all these try-out gigs and the buzz keeps me awake. It's making it hard to hold on to temp jobs." "Oh," the man said. "Can you drive?" One cup of tea at an all-night cafe in Crouch End later and I became House of Maggots' second ever staff member.

Each night after my try-out gigs, I would get a train up to Watford to meet Grant, who patrolled his patch (principally London, and vast swaths of Norfolk and Suffolk, where early-morning anglers gathered by his machines in laybys and car parks), nocturnally maintaining his maggot empire. Like me, Grant had left further education a year previously, having studied finance at Manchester Polytechnic. One morning, setting off early on a fishing trip with an uncle who had forgotten to pack live bait, Grant spotted a gap in the market that his business brain could exploit. And House of Maggots was born.

There was less traffic in the nighttime, and between midnight and morning Grant and I swiftly circumnavigated his machines in a minivan full of permanently chilled larvae. Pretty soon our roles were established. I did all the heavy lifting and driving, while Grant sat in the passenger seat doing paperwork, maintaining his swelling maggot supply lines. Grant's enthusiasm was infectious. I liked him, though we rarely saw eye to eye on politics. Mick Jones from the Clash was Grant's cousin, and we'd blast his tapes from the tinny stereo, singing along to the words while debating the sentiment.

"How can you like the Clash," I asked Grant, "when you're obviously a Tory entrepreneur?" "Easy," he answered. "A protest group like the Clash? They're extremely valuable. The disgruntled proles go and see them on a Saturday night, get drunk, jump around, and feel like their grievances have been addressed. Then they're much happier going back to being wage slaves for the rest of the week." I laughed. Back then I assumed Grant was joking. "Out you get," he continued, "and don't forget to feed the maggots."

One night, as I was topping up a maggot machine in a layby near Thetford, an angler arrived to fill a Tupperware box with comatose larvae. While he made small talk he threaded the fattest maggots on to a succession of hooks, spiking them between two black, eye-like markings on one end. It seems silly to write about it now, but when I got back in the van with Grant I felt a twinge of conscience. "Grant," I said, "don't you ever feel bad about this? We spend the absolute minimum on maintaining those barely alive maggots, just so someone can buy them and then throw them to their deaths?" "My dear fellow," he said, buoyant as ever, "the maggots are comfortable, and they're fed, and they're warm-ish. They are serving an economic purpose. Their pointless existence is being monetised. I validate them."

When I got my first unpaid half spot at the old Comedy Store, on the east side of Leicester Square in December 1990, I told Grant I was quitting and he kindly came to see the show. The hot Saturday night sweat box was stuffed with drunken revellers, packed together at 2am in tight rows like sardines, though I got the feeling Grant saw them as something else. I stumbled through a typical anti-Tory alternative-comedy set and Grant handed me a good-luck card. When I got home I realised it contained the most eloquently written letter of encouragement and £50 in cash. I never saw Grant again.

Grant left House of Maggots, by then a successful outfit with nine employees, in 1997, when he stood as a Conservative MP, but remained a director until 2009, three years before he became chairman of the Conservative party. The skills Grant picked up in marketing maggots seemed to have deserted him earlier this week, when he blundered on to Twitter with an ill-judged graphic about the budget that swiftly sent the social network into meltdown. But I liked Grant back then and I still like him now, despite never actually having met him. Grant just wants all hardworking people to be content, fit for purpose, and able to do more of the things they enjoy.

Stewart Lee appears at the Brighton Dome tonight, in an evening celebrating the music of Nick Pynn, with Kevin Eldon, Boothby Graffoe, Mike Heron and Arthur Brown. Stewart Lee's Comedy Vehicle is on BBC2 on Saturdays at 10pm